The Supreme Court has raised questions over the large difference between the purchase price of medicines and the maximum retail price (MRP) charged to patients, particularly in corporate hospitals.
During a hearing on medicine pricing, the court considered whether a limit should be placed on retail margins and discussed the possibility of restricting the MRP of medicines to a specified percentage above the price at which retailers obtain them.
The discussion has brought renewed attention to the way medicine prices can affect patients, hospital bills and public expenditure.
Court Examines Wide Difference Between Purchase Price and MRP
During the proceedings, the bench headed by Justice Sandeep Mehta referred to an example involving a cancer medicine.
The medicine was reportedly available to a retailer for around ₹3,000 while carrying an MRP of approximately ₹27,000.
The court questioned whether a regulatory framework could restrict the MRP to no more than 16% above the retailer's acquisition price.
The proposal discussed during the hearing would also involve preventing medicines from being sold above the prescribed MRP.
The observations came in the context of a broader petition concerning medicine pricing and treatment costs.
Concerns Over In-House Hospital Pharmacies
The court also examined the situation faced by patients receiving treatment at corporate hospitals.
According to the proceedings, some patients may be required to obtain medicines through an in-house pharmacy while admitted. This can limit their ability to compare prices or purchase the same medicines from outside pharmacies.
The court also considered allegations that medicines purchased independently outside a hospital may sometimes not be accepted during treatment, with hospitals citing responsibility for medicines administered to patients.
Such circumstances can leave patients with limited choices at a time when they are already dealing with significant medical expenses.
Potential Impact on Government Health Schemes
The issue also has implications for publicly funded healthcare.
The court discussed situations in which corporate hospitals provide treatment under government welfare programmes and receive payments from the government.
If medicine prices used for billing are substantially higher than the underlying procurement prices, the difference could affect public expenditure.
The court also pointed to the confusion that large price differences can create for consumers. For example, when the same medicine appears to have a much lower price at one pharmacy than its printed MRP, patients may question whether the cheaper product is genuine.
This creates an additional concern beyond the direct financial burden of treatment.
Government Seeks More Time
Solicitor General Tushar Mehta, appearing for the central government, acknowledged that the issue required a workable solution.
The government indicated that it would need to consult relevant officials and consider the interests of different stakeholders before arriving at a framework.
The court subsequently allowed additional time for the government to examine the matter.
The proceedings have therefore not resulted in a final decision on a 16% retail-margin limit. The issue remains under consideration, including questions surrounding medicine pricing, hospital pharmacies and the relationship between procurement prices and MRPs.
What Happens Next?
The next hearing in the matter has been scheduled for October 12.
Until then, the government is expected to examine the pricing concerns raised during the proceedings and consider whether changes to the existing framework are required.
The case could have wider implications for patients, pharmacies, hospitals and government-funded healthcare schemes if a new pricing mechanism is eventually introduced.
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